E Semi Stocks And NVDA

Friday in the midday update I touched upon a really big picture chart of the Nasdaq Comp. as shown below. What I want you to key in on is the Yellow box I added this weekend that highlights this 5th wave higher because it’s going to come into play further below.

Remember, with regards to Elliott Wave Theory, bull market cycles tend to trace out 5 waves up to complete a whole cycle and bear markets tend to trace out 5 waves down to complete the cycle. Keep in mind this is a big picture chart of the whole bull market cycle. 

Now as with all bull markets there is always some definable leadership. Rather than look at the whole cycle let’s just keep with the theme of this post and hone in on the leadership of this 5th wave yellow box. It’s no secret the Semi stocks as of late have basically put on 44% YTD with the biggest acceleration coming off the Sept. bowling for strikes lows off of multiple supports in the indexes.

Friday I also mentioned how there were some names off the Sept. lows that have the look of what one could say as having gone ballistic to the upside.  So, in keeping with the 5th wave yellow box theme let’s now look at a stock that fits both the individual stock leadership theme as well as the Semi theme.  

Given this chart, don’t be surprised to see us sell the remainder of our long position in the coming days.

As far as the big picture Nasdaq Comp. chart goes? At this point in time, the normal index charts at the beginning of the newsletters everyday are in play and probably will continue to be till year end so don’t go getting all freaked out and bearish yet as there is no topping pattern present. A lot has to happen yet. Not to mention we are entering into that magical time where Wall St. bonuses are at stake too you know (knowing this, do you really think they are going to kill the markets with that at stake here?). All of which could easily mean we see nothing major to the downside till first of the year. All I’m really doing is thinking about next year in what, from the looks of the way we’ve been heading, if it continues thru year end could easily start with a hangover of this current run we are in. For now it’s just a good chart to show we are late in the innings game of this current bull cycle. Don’t read into it anymore than that for the time being, it’s just something to chew on for future reference.

The conversation has to start somewhere and at some time so as to lay the groundwork so we are prepared in advance for not only protecting oneself but also that of being able to seize the opportunity it creates on the short side of the market vs when the time comes being a deer in the headlights like so many of the Greedy Gus’s are going to end up experiencing, if you get my drift. In the coming day/weeks I’ll be expanding upon all this so stay tuned.